By Jon James
Finding a bad credit remortgage lender is not as hard as it used to be. Many people throughout the UK are in the exact same position as you, and there are lenders who are sympathetic to your circumstances and who offer bad credit remortgages or sub prime loans. Bad credit remortgages allow anyone who has bad credit, a county court judgment, loan or credit defaults, rent or mortgage arrears, bankruptcy, decrees, or an IVA to find a lower rate than what they're paying on their existing mortgage.
Bad credit remortgages are also associated with the terms adverse credit remortgage, poor credit remortgage, credit impaired remortgage, non-status remortgage, and non-standard remortgage. A 'sub prime' remortgage indicates you may have a bad credit history. Because of this, you do not meet traditional criteria for money lending, and you will have to find a bad credit remortgage lender. The lower your credit is, the higher the risk that's associated with lending to you. The a bad credit remortgage lender will charge you a higher interest rate to balance the risk associated with lending to someone who does not meet normal credit criteria.
Bad credit remortgages are easier to obtain than ever before. Even though bad credit remortgages have higher interest rates than standard remortgage rates, typically the interest rates on your remortgage will still be substantially below the rate charged by a credit card company.
Finding a Bad Credit Remortgage Lender with a Low APR
Mortgage lending is like any competitive business; if you're willing to spend the time and effort to shop around, you can save thousands of pounds.
Look for a bad credit remortgage lender that has a "loss leader," meaning that the lender offers an initial low fixed rate even for sub prime remortgages. If you are not locked into the remortgage, you can even get a new mortgage deal every couple of years to be sure that you're still getting a competitive rate.
Be aware of early redemption penalties. There is typically a fee for leaving after the introductory period, and you could be charged what is called a redemption penalty. These are charged so that you have to pay if you wish to repay the loan early or if you pay more than the calculated monthly payments. If you do not see it, ask the lender specifically about what type of fees that are associated with leaving after the introductory rate increases.
Sub prime or bad credit remortgages are only needed if you have less than desirable credit. However, if you have a sub prime remortgage and you make all of your payments on time for three years, you will have improved your credit score. At that point, you may qualify to refinance your remortgage to a mainstream remortgage. You will get a lower interest rate when switching from a bad credit remortgage to a mainstream one. In the larger picture, you could save thousands of pounds.
Where can I Find Bad Credit Remortgage Lenders?
There are many lenders who can offer remortgage advice specific to your circumstances. By doing a simple online search of bad credit lenders in the UK, you will see pages of mortgage lenders. However, it is better to find an independent brokerage agency that will allow you to search through remortgage offers from multiple lenders. This way you can compare and find the best deal.
If you don't have time to spend sifting through hundreds of bad credit remortgage offers, let SimplyFinance do it for you. After you provide us with some basic information, we'll introduce you to a bad credit remortgage broker that will answer any bad credit mortgage questions you may have before they do an extensive search of the bad credit remortgage deals available to find the very best deal for you.
Finding bad credit remortgage lenders is easy with the advent of the internet. Just make sure you specify that you are looking for an independent site for sub prime remortgages in the UK. You can also contact lenders you see in TV commercials or get a quote from your local bank. It would be wise to get several quotes before committing to yourself to any remortgage. Shopping around and comparing can literally save you thousands of pounds, so be patient and do not rush into it.
Monday, June 16, 2008
Different Types Of Remortgages
By Graham Bradlington
With fluctuations in mortgage interest rates leading to an all time low, remortgaging property is becoming an increasingly popular option among borrowers. Remortgaging helps to lower interest rates and allow using the increased value of the home for needs requiring urgent cash or for alternative investment options. The variety of available remortgage products fall under any one of the following categories.
Standard Variable rate remortgage (SVR)- This kind of mortgage is based on the Bank Of England's base rate for lending. Usually all mainstream lenders like banks and other financial institutional set their standard variable rate or SVR at 2% above the Bank of England's base lending rate. This means if 5 is the base rate.25% the lender's SVR would be 7.25%. The SVR follows the base rate as it fluctuates up and down. However by shop around a borrower with a good credit rating is sure to get a better rate for his remortgage.
Discounted variable rate remortgage- In such a mortgage a lender, to lure a borrower, provides a discount on the SVR for a specific period, usually between 2 to 5 years, after which the rate bounces back to the SVR. For example if the SVR is 2 % above the base rate, the discounted rate may be just 1.5 % or 1.25% for the discount period. The rate would fluctuate with the base rate but borrower will be paying less than the SVR during the set period.
Fixed Rate remortgage- This is a type of mortgage where the interest rate remains fixed for an agreed period before reverting to the SVR. This period generally ranges between 1 to 5 years but could be longer depending on the particular mortgage deal chosen. The advantage of this type is that the borrower knows exactly what he has to pay as repayment every month with no surprises in store as in the case of other mortgage types. On the downside, it could result in a higher interest rate if market rates go down, as the rate agreed to remains fixed. In addition, an early redemption of the mortgage loan could mean a substantial higher financial penalty.
Capped rate remortgage- Capped rate remortgages are supposed to give the best of variable and fixed rate deals with two drawbacks. One, they carry a relatively higher rate of interest and two, they are saddled with a one-time administration fee. This is because they give the borrower a better cushion against rising interest rates. Capping the upper limit ensures that the borrower does not pay more than the capped rate even if the rates cross the capped level also allowing him the benefit of lower interest rates in case interest rates drop.
Flexible Remortgage - These permit the borrower to adjust repayments according to circumstances. If the borrower has extra cash he can save money by paying more for the early clearance of the mortgage. Or, if there is a scarcity of funds
With fluctuations in mortgage interest rates leading to an all time low, remortgaging property is becoming an increasingly popular option among borrowers. Remortgaging helps to lower interest rates and allow using the increased value of the home for needs requiring urgent cash or for alternative investment options. The variety of available remortgage products fall under any one of the following categories.
Standard Variable rate remortgage (SVR)- This kind of mortgage is based on the Bank Of England's base rate for lending. Usually all mainstream lenders like banks and other financial institutional set their standard variable rate or SVR at 2% above the Bank of England's base lending rate. This means if 5 is the base rate.25% the lender's SVR would be 7.25%. The SVR follows the base rate as it fluctuates up and down. However by shop around a borrower with a good credit rating is sure to get a better rate for his remortgage.
Discounted variable rate remortgage- In such a mortgage a lender, to lure a borrower, provides a discount on the SVR for a specific period, usually between 2 to 5 years, after which the rate bounces back to the SVR. For example if the SVR is 2 % above the base rate, the discounted rate may be just 1.5 % or 1.25% for the discount period. The rate would fluctuate with the base rate but borrower will be paying less than the SVR during the set period.
Fixed Rate remortgage- This is a type of mortgage where the interest rate remains fixed for an agreed period before reverting to the SVR. This period generally ranges between 1 to 5 years but could be longer depending on the particular mortgage deal chosen. The advantage of this type is that the borrower knows exactly what he has to pay as repayment every month with no surprises in store as in the case of other mortgage types. On the downside, it could result in a higher interest rate if market rates go down, as the rate agreed to remains fixed. In addition, an early redemption of the mortgage loan could mean a substantial higher financial penalty.
Capped rate remortgage- Capped rate remortgages are supposed to give the best of variable and fixed rate deals with two drawbacks. One, they carry a relatively higher rate of interest and two, they are saddled with a one-time administration fee. This is because they give the borrower a better cushion against rising interest rates. Capping the upper limit ensures that the borrower does not pay more than the capped rate even if the rates cross the capped level also allowing him the benefit of lower interest rates in case interest rates drop.
Flexible Remortgage - These permit the borrower to adjust repayments according to circumstances. If the borrower has extra cash he can save money by paying more for the early clearance of the mortgage. Or, if there is a scarcity of funds
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